Home Insurance Quotes

Home insurance basics

Home insurance protects what is typically the biggest investment you'll make: Your house. Yet this investment can disappear in matter of minutes or seconds if there's a fire or natural disaster. Insurance is meant to come to the rescue in these times of calamity.

A home insurance policy covers much more than damage to your house. There are additional coverage types within a policy that can save you from financial disaster, with limits often set as a percentage of the dwelling's coverage amount. (Check your own policy for limits.)

Loss of use, meaning additional living expenses you incur if you can't live at home due to damage. This could include hotel bills, restaurant meals and laundry costs. (Often 20 percent of the dwelling amount.)

Liability, for cases where you are sued for damages or injuries to someone else.

Medical bills for people injured on your property or by your pet.

Other items may be covered under your home insurance, with specific limits for each, so check your policy or ask your agent:

Downed trees

Replacement of lawn, trees and shrubs

Debris removal

Power outages, including food spoilage

Grave markers

Unauthorized charges to your credit cards

You may need extra coverage for valuables such as jewelry, your computer equipment, antiques and other pricey possessions, where their value exceeds the coverage limits in your policy.

Home insurance does not cover earthquakes or floods – you'll need to buy separate policies for those if you want coverage for those disasters. And in some areas of the country you need to buy windstorm coverage separately.

Mortgage lenders usually require customers to purchase home insurance. Don't rely on the coverage levels mandated by your mortgage company. Those levels are designed to protect the house itself, but not necessarily your possessions. That's why it's important to check with your agent or insurance company to make sure you have adequate coverage.

Types of home insurance policies

You may hear the term "standard home insurance policy." Home insurance policies are often similar because there are two organizations that supply policy forms to insurers: ISO and the American Association of Insurance Services. Some home insurance companies choose to use their own policies. Whichever type your insurer is using, the policy has to be approved by your state insurance department.

Your premiums will vary, and as with other forms of insurance, you can expect to find a wide range of rates among insurance companies for the exact same level of coverage. That's why it's important to shop around.

Here are the basic types of home insurance policies:

Perils covered in HO-2, HO-4 and HO-6 policies

1. Fire or lightning

2. Windstorm or hail

3. Explosion

4. Riot or civil commotion

5. Damage caused by aircraft

6. Damage caused by vehicles

7. Smoke

8. Vandalism or malicious mischief

9. Theft

10. Volcanic eruption

11. Falling objects

12. Weight of ice, snow, or sleet

13. Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance.

14. Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system.

15. Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance.

16. Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component).

HO-5: Premier homeowners policy

Generally offered to newer, high-end homes that are well-maintained.

Much like the HO-3 policy but contents are covered against all perils except those specifically excluded.

According to the Insurance Information Institute, in some cases, depending the year of construction, the area where you live, your claims history, and other rating factors, you can buy an HO-5 for about the same cost as a traditional HO-3.

HO-6: Insurance for owners of co-ops or condominiums

Provides personal property coverage, liability coverage and specific coverage of improvements to the owner's unit. Insurance provided by the owner's association normally covers most of the actual structure.

HO-8: Policy for older homes

Covers the same perils as HO-2 but pays only for repair costs or actual cash value, since replacement cost could make the policy costly.

Well-suited for older homes whose market value is considerably less than the cost to rebuild them.

Home insurance rates

Many factors go into determining the premiums for a homeowners policy. The age of your home, the materials used to build it, where it's located, the square footage and its distance from a fire hydrant all generally play a role in rates.

When shopping for home insurance, remember this: Insure your house for the cost to replace it (meaning reconstruction costs), not its real estate "market value, and don't factor in the value of your land.

The insurer should be able to give you an estimate for rebuilding your house in the event of a total loss. That estimate should be your dwelling coverage amount.

If you raise your deductible you will be able to lower your premium. You may be used to a flat-dollar amount deductible, such as $1,000. But recent years have seen the spread of percentage-based deductibles -- for either all property-damage claims or for claims for certain perils, like windstorms.

These policies make you liable for 1 to 5 percent of your home’s insured value (not a percent of the amount of the claim) before the insurance company pays. So, if you have a 2 percent deductible and your home's insured value is $250,000, you're on the hook for $5,000.

Replacing personal property

The extent of coverage for your belongings depends on the policy's loss settlement clause. This clause identifies property that will be valued at actual cash value, and property that will be valued at replacement cost.

Before buying home insurance, understand the differences between "actual cash value" and "replacement cost."

Replacement cost policies give you more protection than actual cash value coverage. For example, what happens if a burglar steals your six-year-old television set? With actual cash value coverage, you get only what you would expect to pay for a six-year-old television set. With replacement cost coverage, the insurance company pays to replace your TV with a new set similar to the stolen one.

Extended replacement cost for your house

In another twist to your policy choices, some companies offer coverage for your dwelling that goes beyond its insured value. In other words, your premium might be determined based on dwelling coverage for $200,000, but if your home is destroyed and it costs $215,000 to rebuild, you're covered.

Guaranteed replacement cost coverage pays for the full cost of replacing or repairing a damaged or destroyed home, even if it is above the policy limit. You may have a tough time finding a policy with guaranteed replacement cost.

Guaranteed and extended replacement cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can push up the normal cost of reconstruction.

Other insurance you may need for your home

There are many potential extras, such as coverage for sewer back-ups and building-code upgrades. Below are some important additional coverage types.

In much if the country, damage for wind is already included in a homeowners policy. But in hurricane-prone areas like Florida, homeowners who want to insure against wind damage need to buy special windstorm coverage.

If you want more liability coverage than your home and car insurance policies provide, you can buy a separate umbrella insurance policy. This is a good idea if you have a lot of assets and would be open to a big lawsuit if you cause a lot of damage. The liability coverage gained through an umbrella policy is also relatively cheap.

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QuinStreet does not include all insurance companies or all types of products available in the marketplace.